This article throws light upon the nine main reasons attributed to the need of communication in an organisation. The reasons are: 1. Size of the Organisation 2. Human Relations 3. Social Relations 4. Growing Role of Trade Unions 5. Technological Development 6. Development of Behavioural Sciences 7. Increasing Competition 8. Information Technology 9. Growing Specialisation.

Reason # 1. Size of the Organisation:

Modern organisations are large in size. They have operations at the global level and employ thousands of people to carry out the organisational activities. Increasing number of branch offices and organisational levels require the chief executive to maintain a system of communication where all members work in a closely-knit framework of relationships. This is facilitated through an effective communication system.

Reason # 2. Human Relations:

Modern theories of management focus on employee-centred relationships rather than task-centred. If employees are treated as human beings, desired goals will be achieved. Employees are allowed to participate in decision-making processes and also represent on boards of management. Increasing role of employees in carrying out organisational activities requires increasing need for communication between them and the managers.

Reason # 3. Social Relations:

Business organisations are social institutions. They deal with different sections of society like customers, Government, suppliers, etc. To be successful in achieving the goals, they need to inform the society about their financial and non-financial activities, values and code of ethics. Communication helps in building corporate image in the society.

Reason # 4. Growing Role of Trade Unions:


Trade unions are the representatives of labour force. They represent an important area of organisation structure. Managers consult the unions in most of the matters that directly affect workers’ interests like wages, working conditions, promotions etc. There is regular exchange of information between management and trade unions and, thus, the need for effective communication.

Reason # 5. Technological Development:

Technological advancements are rapidly taking place in the modern world. Updated technology is necessary for organisational survival and growth. Technology can be effective only if people understand new ways of doing things. This requires training and motivation of the staff which necessitates the need for effective communication.

Reason # 6. Development of Behavioural Sciences:

Modern management theories are applications of behavioural sciences. They draw knowledge from different fields of study like sociology, anthropology, psychology etc. to understand human behaviour; intrapersonal and interpersonal. This requires communication amongst behavioural experts and thus, the need for effective communication system.

Reason # 7. Increasing Competition:

Competition amongst business firms (Indian and foreign firms), economic sectors (public and private) and financial institutions (banks and other financial institutions) is increasing and requires organisations to remain well informed of competitors’ policies and strategies.


They must know changes in economic and non-economic policies. Communication with different sections of society in this regard helps firms to survive in the environment of stiff competition.

Reason # 8. Information Technology:

Information technology is fast expanding and affecting business decisions. Decisions are based on latest information available through management information systems. This highlights the need for effective communication.

Reason # 9. Growing Specialisation:

Modern organisations are highly specialised. Each department looks after related set of activities. For example, production department looks after production and sales department looks after sales only. However, both these departments constantly communicate with each other so that production and sales are coordinated with each other. Lack of coordination may result in under-production or low sales.